China challenges textile quotas

China has decided to abandon limits on textile exports to the United States and the European Union after the US and the EU threatened to retaliate by putting quotas on Chinese textile shipments.

China’s commerce minister announced Monday that his country would cancel export tariffs on 81 clothing and textile products beginning on Tuesday.

However, China reserved the option of taking the dispute before the World Trade Organization in the future. China has claimed that the EU’s move to single out T-shirts and flax yarn for possible sanctions may violate WTO rules.

The EU rejects that claim and has said that it was surprised at China’s decision to cancel their tariffs.

The dispute began after Chinese sales of some clothing and textiles surged following the end of global quotas on January 1.

Pressure from domestic manufacturers caused the US and EU to invoke a WTO agreement allowing resumption of quotas in case of a “surge” in imports.

China claims that the decision to reimpose quotas was based on insufficient data over too short a period of time and blamed the US and EU for failing to prepare their textiles industries for the end of quotas.

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